November
2008
The Future of Your Son or Daughter, the Right Way to Invest the Two Hundred and Fifty Pounds
Are you aware of the Child Trust Fund and its benefits? a small amount seem to be aware of the fact that all babies get a free £250 voucher from the government to put in a Child Trust Fund. The voucher can be invested in any one of three sorts of CTF account, Stakeholder – a shares-based account thatchanges into cash, a savings account or a shares account. It is a superb chance to invest for the future requirements of a infant
Scottish Friendly is a licensed provider of the Child Trust Fund The Government is eager for people to have access to Stakeholder accounts and this is the sort of account that we offer. This means that:
Investments are saved into our Managed Growth Fund, which hopes to provide strong growth potential
It invests partly in shares to make the most of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
fall as well as go up whereas capital would be protected in a deposit account)
It comes with a low ‘Stakeholder’ funds charge of just 1.5 percent annually
At age 18 the child will receive a lump sum, wholly free of Capital Gains and Income Tax under present law
It is very affordable – additional payments can be put in the account from only £10
A notable attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – if they want can contribute to the Fund to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money is not allowed to be withdrawn).
What this means is that our Stakeholder account offers a good balance between potentially high returns and a lower level of risk. There is also the additional assurance that our account complies with the Government’s stakeholder criteria. Nevertheless this does not mean that returns are guaranteed or that Stakeholder accounts are appropriate for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can fall as well as go up and would not be guaranteed.
Only children born on or after 1st September 2002 are qualified to start up a Child Trust Fund. If you have children born before the above-mentioned date who are not entitled you could look at saving for them with a Child Bond – it’s a tax-free savings plan intended for long-term growth.
There can be no doubt that saving for your son is a sensible means of preparing for the future.
